Advertising

Advertising is a paid, one-way communication through a medium in which the sponsor is identified and the message is controlled. Variations include publicity, public relations, product placement, sponsorship, underwriting, and sales promotion. Every major medium is used to deliver these messages, including: television, radio, movies, magazines, newspapers, the Internet, and billboards.

Advertisements can also be seen on the seats of grocery carts, on the walls of an airport walkway, on the sides of buses, heard in telephone hold messages and in-store PA systems. Advertisements are usually placed anywhere an audience can easily and/or frequently access visuals and/or audio, especially on clothing.

Advertising clients are predominantly, but not exclusively, for-profit corporations seeking to increase demand for their products or services. Some organisations that frequently spend large sums of money on advertising but do not strictly sell a product or service to the general public include: political parties, interest groups, religion-supporting organisations, and militaries looking for new recruits. Additionally, some non-profit organizations are not typical advertising clients and rely upon free channels, such as public service announcements. For instance, a well-known exception to the use of commercial advertisements is Krispy Kreme doughnuts which relies on word-of-mouth.

The advertising industry is large and growing. In the United States alone in 2005, spending on advertising reached $144.32 billion, reported TNS Media Intelligence. That same year, according to a report titled Global Entertainment and Media Outlook: 2006-2010 issued by global accounting firm PricewaterhouseCoopers, worldwide advertising spending was $385 billion. The accounting firm's report projected worldwide advertisement spending to exceed half-a-trillion dollars by 2010.

While advertising can be seen as necessary for economic growth, it is not without social costs. Unsolicited Commercial Email and other forms of spam have become so prevalent as to have become a major nuisance to users of these services, as well as being a financial burden on internet service providers. Advertising is increasingly invading public spaces, such as schools, which some critics argue is a form of child exploitation. One scholar has argued that advertising is a toxic by-product of industrial society which may bring about the end of life on earth.

History

Black-figured lekythos with the inscription: “buy me and you'll get a good bargain”, ca. 550 BC, Louvre

Commercial messages and political campaign displays have been found in the ruins of ancient Arabia. Egyptians used papyrus to create sales messages and wall posters, while lost-and-found advertising on papyrus was common in Ancient Greece and Ancient Rome. Wall or rock painting for commercial advertising is another manifestation of an ancient advertising form, which is present to this day in many parts of Asia, Africa, and South America.

The tradition of wall painting can be traced back to Indian rock-art paintings that date back to 4000 BCE. As printing developed in the 15th and 16th century, advertising expanded to include handbills. In the 17th century advertisements started to appear in weekly newspapers in England. These early print advertisements were used mainly to promote: books and newspapers, which became increasingly affordable due to the printing press; and medicines, which were increasingly sought after as disease ravaged Europe. However, false advertising and so-called "quack" advertisements became a problem, which ushered in the regulation of advertising content.

Edo period advertising flyer from 1806 for a traditional medicine called Kinseitan

As the economy expanded during the 19th century, advertising grew alongside. In the United States of America, classified advertisements became popular, filling pages of newspapers with small print messages promoting various goods. The success of this advertising format eventually led to the growth of mail-order advertising such as

In 1841, the first advertising agency was established by Volney Palmer in Boston. It was also the first agency to charge a commission on ads at 25% commission paid by newspaper publishers to sell space to advertisers. At first, agencies were brokers for advertisement space in newspapers. N.W. Ayer & Son was the first full-service agency to assume responsibility for advertising content. N.W. Ayer opened in 1875, and was located in Philadelphia.

At the turn of the century, there were few career choices for women in business; however, advertising was one of the few. Since women were responsible for most of the purchasing done in their household, advertisers and agencies recognised the value of women's insight during the creative process. In fact, the first American advertising to use a sexual sell was created by a woman – for a soap product. Although tame by today's standards, the advertisement featured a couple with the message "The skin you love to touch".

A print advertisement for the 1913 issue of the Encyclopædia Britannica

When radio stations began broadcasting in the early 1920s, the programs were aired without advertisements. This was so because the first radio stations were established by radio equipment manufacturers and retailers who offered programs in order to sell more radios to consumers. As time passed, many non-profit organizations followed suit in setting up their own radio stations, and included: schools, clubs and civic groups.[6] When the practice of sponsoring programs was popularised, each individual radio program was usually sponsored by a single business in exchange for a brief mention of the business' name at the beginning and end of the sponsored shows. However, radio station owners soon realised they could earn more money by selling sponsorship rights in small time allocations to multiple businesses throughout their radio station's broadcasts, rather than selling the sponsorship rights to single businesses per show. This practice was carried over to television in the late 1940s and early 1950s.

A fierce battle was fought between those seeking to commercialise the radio and people who argued that the radio spectrum should be considered a part of the commons – to be used only non-commercially and for the public good. In Canada, advocates like Graham Spry were able to convince the federal government to adopt a socialist funding model. England followed suit with the development of the BBC. However in the United States, the capitalist model prevailed with the passage of the 1934 Communications Act which created the Federal Communications Commission. To placate the socialists, the U.S. Congress did require commercial broadcasters to operate in the "public interest, convenience, and necessity." Nevertheless, public radio does exist in the United States of America.

In the early 1950s, the Dumont television network began the modern trend of selling advertisement time to multiple sponsors. Previously, Dumont had trouble finding sponsors for many of their programs and compensated by selling smaller blocks of advertising time to several businesses. This eventually became the norm for the commercial television industry in the United States. However, it was still a common practice to have single sponsor shows, such as the U.S. Steel Hour. In some instances the sponsors exercised great control over the content of the show - up to and including having one's advertising agency actually writing the show. The single sponsor model is much less prevalent now, a notable exception being the Hallmark Hall of Fame.

The 1960s saw advertising transform into a modern, more scientific approach in which creativity was allowed to shine, producing unexpected messages that made advertisements more tempting to consumers' eyes. The Volkswagen ad campaign--featuring such headlines as "Think Small" and "Lemon" (which were used to describe the appearance of the car)--ushered in the era of modern advertising by promoting a "position" or "unique selling proposition" designed to associate each brand with a specific idea in the reader or viewer's mind. This period of American advertising is called the Creative Revolution and its poster boy was Bill Bernbach who helped create the revolutionary Volkswagen ads among others. Some of the most creative and long-standing American advertising dates to this incredibly creative period.

Public advertising on Times Square, New York City.

The late 1980s and early 1990s saw the introduction of cable television and particularly MTV. Pioneering the concept of the music video, MTV ushered in a new type of advertising: the consumer tunes in for the advertising message, rather than it being a byproduct or afterthought. As cable and satellite television became increasingly prevalent, specialty channels emerged, including channels entirely devoted to advertising, such as QVC, Home Shopping Network, and ShopTV.

Marketing through the Internet opened new frontiers for advertisers and contributed to the "dot-com" boom of the 1990s. Entire corporations operated solely on advertising revenue, offering everything from coupons to free Internet access. At the turn of the 21st century, the search engine Google revolutionized online advertising by emphasizing contextually relevant, unobtrusive ads intended to help, rather than inundate, users. This has led to a plethora of similar efforts and an increasing trend of interactive advertising.

The share of advertising spending relative to GDP has changed little across large changes in media. For example, in the U.S. in 1925, the main advertising media were newspapers, magazines, signs on streetcars, and outdoor posters. Advertising spending as a share of GDP was about 2.9%. By 1998, television and radio had become major advertising media. Nonetheless, advertising spending as a share of GDP was slightly lower -- about 2.4%.

A recent advertising innovation is "guerrilla promotions", which involve unusual approaches such as staged encounters in public places, giveaways of products such as cars that are covered with brand messages, and interactive advertising where the viewer can respond to become part of the advertising message. This reflects an increasing trend of interactive and "embedded" ads, such as via product placement, having consumers vote through text messages, and various innovations utilizing social networking sites (e.g. MySpace).

Paul McManus, the Creative Director of TBWA\Europe in the late 90's summed up advertising as being "...all about understanding. Understanding of the brand, the product or the service being offered and understanding of the people (their hopes and fears and needs) who are going to interact with it. Great advertising is the creative expression of that understanding."

Branding

Although advertising has existed for a long time, explicit "branding" is a product of the late 1800s. Due to the prevalence of dangerous products and unregulated industries of the Industrial Revolution, brands were introduced to increase the reputation and value of a particular manufacturer. An identified brand often meant safety and quality. For example, Quaker Oats is among the oldest modern brands in continual use.

Lydia Pinkham was one of the true success stories of personality branding. Her family used her name and image to promote their patent medicine in the 1800s. The product was incredibly successful. Women wrote Lydia for advice; often the company would reply. Lydia herself was uninvolved; even after her death the company kept up appearances, continuing to answer letters addressed to her by consumers.

Mobile Billboard Advertising

Mobile Billboards are flat-panel campaign units in which their sole purpose is to carry advertisements along dedicated routes selected by clients prior to the start of a campaign. Mobile Billboard companies do not typically carry third-party cargo or freight. Mobile displays are used for various situations in metropolitan areas throughout the world, including:

• Target advertising
• One day, and long term campaigns
• Convention
• Sporting events
• Store openings or other similar promotional events
• Big advertisements from smaller companies

Public Service Advertising

The same advertising techniques used to promote commercial goods and services can be used to inform, educate and motivate the public about non-commercial issues, such as AIDS, political ideology, energy conservation, religious recruitment, and deforestation.

Advertising, in its non-commercial guise, is a powerful educational tool that is capable of reaching and motivating large audiences. "Advertising justifies its existence when used in the public interest - it is much too powerful a tool to use solely for commercial purposes." - Attributed to Howard Gossage by David Ogilvy

Public service advertising, non-commercial advertising, public interest advertising, cause marketing, and social marketing are different terms for (or aspects of) the use of sophisticated advertising and marketing communications techniques (generally associated with commercial enterprise) on behalf of non-commercial, public interest issues and initiatives.

In the United States, the granting of television and radio licenses by the FCC is contingent upon the station broadcasting a certain amount of public service advertising. To meet these requirements, many broadcast stations in America air the bulk of their required Public Service Announcements during the late night or early morning when the smallest percentage of viewers are watching, leaving more day and prime time commercial slots available for high-paying advertisers.

Public service advertising reached its height during World Wars I and II under the direction of several governments.

Commercial Advertising Media

Commercial advertising media can include wall paintings, billboards, street furniture components, printed flyers and rack cards, radio, cinema and television ads, web banners, shopping carts, web popups, skywriting, bus stop benches, human directional, magazines, newspapers, town criers, sides of buses, taxicab doors, roof mounts and passenger screens, musical stage shows, subway platforms and trains, elastic bands on disposable diapers, stickers on apples in supermarkets, the opening section of streaming audio and video, posters, and the backs of event tickets and supermarket receipts. Any place an "identified" sponsor pays to deliver their message through a medium is advertising.

Another way to measure advertising effectiveness is known as ad tracking. This advertising research methodology measures shifts in target market perceptions about the brand and product or service. These shifts in perception are plotted against the consumers’ levels of exposure to the company’s advertisements and promotions.The purpose of Ad Tracking is generally to provide a measure of the combined effect of the media weight or spending level, the effectiveness of the media buy or targeting, and the quality of the advertising executions or creative. Ad Tracking Article

Covert Advertising - Product Placement

Covert advertising is when a product or brand is embedded in entertainment and media. For example, in a film, the main character can use an item or other of a definite brand, as in the movie Minority Report, where Tom Cruise's character John Anderton owns a phone with the Nokia logo clearly written in the top corner, or his watch engraved with the Bulgari logo. Another example of advertising in film is in I, Robot, where main character played by Will Smith mentions his Converse shoes several times, calling them "classics," because the film is set far in the future. I, Robot and Spaceballs also showcase futuristic cars with the Audi and Mercedes-Benz logos clearly displayed on the front of the vehicles, respectively. Cadillac chose to advertise in the movie The Matrix Reloaded, which as a result contained many scenes in which Cadillac cars were used. Similarly, product placement for Omega Watches, Vaio, BMW and Aston-Martin cars are featured in recent James Bond films, most notably, Casino Royale.

Television Commercial Advertisement

The TV commercial is generally considered the most effective mass-market advertising format and this is reflected by the high prices TV networks charge for commercial airtime during popular TV events. The annual Super Bowl football game in the United States is known as much for its commercial advertisements as for the game itself, and the average cost of a single thirty-second TV spot during this game has reached $2.7 million (as of 2007).

Virtual advertisements may be inserted into regular television programming through computer graphics. It is typically inserted into otherwise blank backdrops or used to replace local billboards that are not relevant to the remote broadcast audience. More controversially, virtual billboards may be inserted into the background where none existing in real-life. Virtual product placement is also possible.

Newer Media and Advertising Approaches

Increasingly, other mediums such as those discussed below are overtaking television due to a shift towards consumer's usage of the Internet as well as devices such as TiVo.

Advertising on the World Wide Web is a recent phenomenon. Prices of Web-based advertising space are dependent on the "relevance" of the surrounding web content and the traffic that the website receives.

E-mail advertising is another recent phenomenon. Unsolicited bulk E-mail advertising is known as "spam".

Some companies have proposed to place messages or corporate logos on the side of booster rockets and the International Space Station. Controversy exists on the effectiveness of subliminal advertising (see mind control), and the pervasiveness of mass messages (see propaganda).

Unpaid advertising (also called word of mouth advertising), can provide good exposure at minimal cost. Personal recommendations ("bring a friend", "sell it"), spreading buzz, or achieving the feat of equating a brand with a common noun ("Xerox" = "photocopier", "Kleenex" = tissue, "Vaseline" = petroleum jelly, "Hoover" = vacuum cleaner and "Band-Aid" = adhesive bandage.) -- these are the pinnacles of any advertising campaign. However, some companies oppose the use of their brand name to label an object.

SMS (Short Message Service) text messages have taken Europe by storm and are breaking into the USA. The addition of a text-back number is gaining prevalence as a www address of yesterday. Used as part of your companies 'how to contact us' these can be very effective. These can be a (rented) keyword on a short-code or your own system on a standard number (like Mojio Messenger). The benefit of SMS text messages is people can respond where they are, right now, stuck in traffic, sitting on the metro. The use of SMS text messages can also be a great way to get a viral (word-of-mouth) campaign off the ground to build your own database of prospects see Viral marketing. Interstitial advertisement is a form of advertisement which takes place while a page loads.

From time to time, The CW airs short programming breaks called "Content Wraps," to advertise one company's product during an entire commercial break. The CW pioneered "content wraps" and some products featured were Herbal Essences, Crest, Guitar Hero 2, Cover Girl, and recently Toyota.

Measuring the Impact of Mass Advertising

The most common method for measuring the impact of mass media advertising is the use of the rating point (rp) or the more accurate target rating point (trp). These two measures refer to the percentage of the universe of the existing base of audience members that can be reached by the use of each media outlet in a particular moment in time. The difference between the two is that the rating point refers to the percentage to the entire universe while the target rating point refers to the percentage to a particular segment or target. This becomes very useful when focusing advertising efforts on a particular group of people.

Negative Effects of Advertising

An extensively documented effect is the control and vetoing of free information by the advertisers. Any negative information on a company or its products or operations often results in pressures from the company to withdraw such information lines, threatening to cut their ads. This behaviour makes the editors of the media self-censor content that might upset their ad payers. The bigger the companies are, the bigger their relation becomes, maximising control over a single piece of information.

Advertisers may try to minimise information about or from consumer groups, consumer-controlled purchasing initiatives (as joint purchase systems), or consumer-controlled quality information systems.

Another indirect effect of advertising is to modify the nature of the communication media where it is shown. Media that get most of their revenues from publicity try to make their medium a good place for communicating ads before anything else. The clearest example is television, where broadcasters try to make the public stay for a long time in a mental state that encourages spectators not to switch the channel during advertisements. Programs that are low in mental stimulus, require light concentration and are varied are best for long sitting times. These also make for much easier emotional transition to ads, which are occasionally more entertaining than the regular shows. A simple way to understand objectives in television programming is to compare the content of programs paid for and chosen by the viewer with those on channels that get their income mainly from advertisements.

In several books, articles and videos, communication professor Sut Jhally has argued that pervasive commercial advertising, by constantly reinforcing a bogus association between consumption and happiness and by focusing on individual immediate needs, leads to a squandering of resources and stands in the way of a discussion of fundamental societal and long-term needs.

Advertising Regulation

There have been increasing efforts to protect the public interest by regulating the content and the influence of advertising. Some examples are: the ban on television tobacco advertising imposed in many countries, and the total ban of advertising to children under twelve imposed by the Swedish government in 1991. Though that regulation continues in effect for broadcasts originating within the country, it has been weakened by the European Court of Justice, which had found that Sweden was obliged to accept foreign programming, including those from neighboring countries or via satellite.

In Europe and elsewhere, there is a vigorous debate on whether (or how much) advertising to children should be regulated. This debate was exacerbated by a report released by the Kaiser Family Foundation in February 2004 which suggested that food advertising targeting children was an important factor in the epidemic of childhood obesity in the United States of America.

In many countries - namely New Zealand, South Africa, Canada, and many European countries - the advertising industry operates a system of self-regulation. Advertisers, advertising agencies and the media agree on a code of advertising standards that they attempt to uphold. The general aim of such codes is to ensure that any advertising is 'legal, decent, honest and truthful'. Some self-regulatory organisations are funded by the industry, but remain independent, with the intent of upholding the standards or codes (like the Advertising Standards Authority in the UK).

Naturally, many advertisers view governmental regulation or even self-regulation as intrusion of their freedom of speech or a necessary evil. Therefore, they employ a wide-variety of linguistic devices to bypass regulatory laws (e.g. printing French words in bold and English translations in fine print to deal with the Article 12 of the 1994 Toubon Law limiting the use of English in French advertising); see Bhatia and Ritchie 2006:542. The advertisement of controversial products such as cigarettes and condoms is subject to government regulation in many countries. For instance, the tobacco industry is required by law in most countries to display warnings cautioning consumers about the health hazards of their products. Linguistic variation is often used by advertisers as a creative device to reduce the impact of such requirements.

Global Advertising

Advertising has gone through five major stages of development: domestic, export, international, multi-national, and global. For global advertisers, there are four, potentially competing, business objectives that must be balanced when developing worldwide advertising: building a brand while speaking with one voice, developing economies of scale in the creative process, maximising local effectiveness of ads, and increasing the company’s speed of implementation. Born from the evolutionary stages of global marketing are the three primary and fundamentally different approaches to the development of global advertising executions: exporting executions, producing local executions, and importing ideas that travel. (Global marketing Management, 2004, pg 13-18)

Advertising research is key to determining the success of an ad in any country or region. The ability to identify which elements and/or moments of an ad that contributes to its success is how economies of scale are maximised. Once one knows what works in an ad, that idea or ideas can be imported by any other market. Market research measures, such as Flow of Attention, Flow of Emotion and branding moments provide insight into what is working in an ad in any country or region because the measures are based on the visual, not verbal, elements of the ad. (Young, p.131)

Other

With the dawn of the Internet come many new advertising opportunities. Popup, Flash, banner, advergaming, and email advertisements (the last often being a form of spam) abound.

Each year, greater sums are paid to obtain a commercial spot during the Super Bowl, which is by most measures considered to be the most important American football game of the year. Companies attempt to make these commercials sufficiently entertaining so that members of the public would actually want to watch them.

Another phenomenon is the recording of shows on DVRs (ex. TiVo). These devices allow users to record the programs for later viewing, enabling them to fast forward through commercials. Additionally, as more seasons or “Boxed Sets” come out of Television shows; fewer people watch the shows on TV. However, the fact that these sets are sold, means the company will receive additional profits from the sales of these sets. To counter this effect, many advertisers have opted for product placement on TV shows like Survivor.

Particularly since the rise of "entertaining" advertising, some people may like an advertisement enough to wish to watch it later or show a friend. In general, the advertising community has not yet made this easy, although some have used the Internet to widely distribute their ads to anyone willing to see or hear them.

Another significant trend regarding future of advertising is the growing importance of niche or targeted ads. Also brought about by the Internet and the theory of The Long Tail, advertisers will have an increasing ability to reach specific audiences. In the past, the most efficient way to deliver a message was to blanket the largest mass market audience possible. However, usage tracking, customer profiles and the growing popularity of niche content brought about by everything from blogs to social networking sites, provide advertisers with audiences that are smaller but much better defined, leading to ads that are more relevant to viewers and more effective for companies' marketing products. Among others, Comcast Spotlight is one such advertiser employing this method in their video on demand menus. These advertisements are targeted to a specific group and can be viewed by anyone wishing to find out more about a particular business or practice at any time, right from their home. This causes the viewer to become proactive and actually choose what advertisements they want to view.

In freelance advertising, companies hold public competitions to create ads for their product, the best one of which is chosen for widespread distribution with a prize given to the winner(s). During the 2007 Super Bowl, Pepsico held such a contest for the creation of a 30-second television ad for the Doritos brand of chips, offering a cash prize to the winner. Chevrolet held a similar competition for their Tahoe line of SUVs. This type of advertising, however, is still in its infancy. It may ultimately decrease the importance of advertising agencies by creating a niche for independent freelancers.

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